property

Output of Hungary’s construction sector rose by an annual 30.7% in November, the Central Statistical Office (KSH) said. The increase came from a low base.

Output of the building segment rose by 29.1% during the period. Output of the civil engineering segment climbed by 33.9%. KSH said output of the building segment was driven by residential and school construction, as well as the construction of industrial buildings. In the civil engineering segment, construction of highways and railways supported the increase.

Output at current prices was up at 261 billion forints (EUR 844.5m) from 186.4 billion in November 2016.

Stock of orders was up 110.3% at the end of November from twelve months earlier, albeit from a low base. Orders in the building segment were up by 30.2% and orders in the civil engineering segment increased by 161.6%. New orders were up 11.7%, falling by 8.2% in the building segment and rising by 43.4% in the civil engineering segment. Construction sector output was up 28.7% year-on-year in January-November.

Commenting on the data, Economy Minister Mihály Varga told public television that government measures such as the home purchase subsidies (CSOK), state-funded investments and VAT cuts in the sector have contributed to an upswing in home construction. The government is to launch a 20 billion forint equipment procurement programme in the construction sector to ease shortage of labour in SMEs with technology, he said.

Dávid Németh, analyst at K&H Bank, said that 2017 brought a spectacular rise in construction after the 2016 ebb. Rising prices stemming from shortage of workforce and uncertainty about whether the VAT cut on home constructions will be prolonged may curb growth, he warned.

András Horváth of Takarékbank estimated a 28% overall growth for 2017. Shortage of manpower, which may impact the trend, hits especially small enterprises, he said.

László Koji of the union of construction entrepreneurs (ÉVOSZ) said that the stock of orders indicates a two-digit growth for 2018.

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